As rural hospitals face closures, Mass. General plans $1B expansion

Rural hospitals in the United States have been closing at a rapid clip over the last several years––nearly 100 since 2010, according to one estimate. Another 600-plus rural hospitals are at risk of closing, with many clustered in the 14 remaining states that have not expanded Medicaid under the Affordable Care Act, according to the Pew Institute.

Rural hospitals are facing tougher times partly due to their states not expanding Medicaid, and many of these closures are happening in Texas, according to Pew. Not expanding Medicaid in the state would deprive Texas hospitals of $34.3 billion in federal reimbursement over a decade, according to a 2014 Urban Institute study cited by Pew.

The lack of federal funds in Texas and other non-expansion states have driven hospitals to severe cost-cutting measures, including closing obstetrics units and other expensive services, that have forced patients to travel long distances for care. Eventually, with diminished care, the purpose for these hospitals ceases to exist.

In states that did not expand Medicaid, many low-income residents remain uninsured or underinsured, leaving hospitals on the hook when these individuals receive care. Hospitals are forced to absorb costs when people show up to the hospital and can’t pay for care, and rural Americans tend to be older, in poorer health and less insured than those living elsewhere.

In Oklahoma, state rural hospitals carried $170 million in bad debt from unpaid patient bills and charitable care, according to the Oklahoma Hospital Association, cited by Pew. Congress has further poured salt in this wound by cutting back on the amount of bad debt hospitals can deduct, according to Pew.

However, expanding Medicaid might not save rural hospitals that are struggling with inefficiencies or wasteful spending. And in states like Texas, a move toward expanding Medicaid isn’t likely any time soon.